There wasn’t much on the docket for today’s morning London session, so the European currencies extended last week’s themes and fought it out for the top spot.
And in the end, the Swissy beat back the pound and edged out the euro to emerge as the one currency to rule them all, likely because the Swissy got an extra boost from the risk-off vibes in Europe.
While all that was happening, the Greenback quietly continued to bleed out in the background.
- Euro Zone trade balance: €22.5B vs. €22.3B expected, €19.0B previous
Oil dips as other commodities rise
Most commodities picked up where they left off last week by staging another broad-based rally. Not all commodities were in rally mode, though, since oil prices took hits during the course of the session.
Anyhow, the commodities rally was very likely due to another round of Greenback weakness. And for reference the U.S. dollar index was down by 0.51% to 90.16 for the day by the end of the morning London session.
As to why oil went against the bullish tide, market analysts blamed that on profit-taking amid reports of higher U.S. oil drilling activity.
Precious metals are off to a good start this week.
- Gold was up by 0.63% to $1,343.30 per troy ounce
- Silver was up by 1.34% to $17.370 per troy ounce
The same can be said of base metals.
- Copper was up by 1.69% to $3.273 per pound
- Nickel was up by 2.01% to $12,917.50 per dry metric ton
As mentioned earlier, however, oil benchmarks went in the opposite direction.
- U.S. WTI crude oil was down by 0.12% to $64.22 per barrel
- Brent crude oil was down by 0.17% to $69.75 per barrel
Gloomy start in Europe
Europe is apparently starting the new trading week on a downbeat since the major European equity indices were broadly leaking red during the morning London session.
And market analysts say that the gloomy vibes in Europe were due to a host of reasons, which include pressure from the stronger euro on European exporters, the intraday slide in oil prices that weighed on energy shares, poor sales reports from some European retailers, and plain profit-taking after European equities rallied since the start of the new year.
- The pan-European FTSEurofirst 300 was down by 0.22% to 1,564.29
- Germany’s DAX was down by 0.42% to 13,189.50
- The blue-chip Euro Stoxx 50 was down by 0.11% to 3,604.50
Major Market Mover(s):
The Swissy somehow edged out the mighty euro and was the top-performing currency of the morning London session. As to what allowed the Swissy to outpace the euro, well, that was likely due to safe-haven flows in favor of the Swissy, given the prevalence of risk aversion in Europe during the session.
USD/CHF was down by 56 pips (-0.58%) to 0.9609, AUD/CHF was down by 39 pips (-0.51%) to 0.7639, NZD/CHF was down by 20 pips (-0.30%) to 0.7007
The mighty euro is off to another promising start this week and was even the second best-performing currency of the morning London session.
The Euro Zone’s trade report impressed a bit, which likely helped to sustain demand for the euro. However, most market analysts pointed to speculation that the ECB may change its tune or even taper its QE program after last week’s hawkish ECB minutes.
Although other market analysts also pointed to optimism over the Euro Zone economy and expectations that a pro-EU coalition government will be formed in Germany.
EUR/USD was up by 59 pips (+0.48%) to 1.2269, EUR/JPY was up by 43 pips (+0.32%) to 135.75, EUR/AUD was up by 60 pips (+0.40%) to 1.5432
After a bitter struggle against the euro and the Swissy, the pound closed out the morning London session in third place, which is still a pretty good performance.
There weren’t really any major catalysts, so market analysts said that we’re seeing a continuation of last week’s theme, namely the pound’s strength after Brexit-related jitters eased a bit when Spain and Portugal said they support a softer Brexit trade deal for the U.K.
GBP/USD was up by 32 pips (+0.23%) to 1.3787, GBP/JPY was up by 22 pips (+0.15%) to 152.56, GBP/AUD was up by 32 pips (+0.19%) to 1.7343
The Greenback took another broad-based hit and was the worst-performing currency of the morning London session, as well as the worst-performing currency of the day (so far).
USD/JPY was down by 16 pips (-0.14%) to 110.64, USD/CAD was down by 22 pips (-0.18%) to 1.2423, NZD/USD was down by 24 pips (+0.33%) to 0.7293
Watch Out For:
- 6:15 pm GMT: BOE MPC Member Silvana Tenreyro will speak
- 9:00 pm GMT: New Zealand Institute of Economic Research business confidence index (5 index points previous)
- MLK Jr. holiday in the U.S.A. today